Pooling – Drug Insurance in Quebec 2011 Terms and Conditions

December
22,
2010

News Release

Pooling System

The pooling system was implemented following the introduction of the Quebec general drug insurance
plan in 1997. The Quebec Drug Insurance Pooling Corporation (QDIPC) was then set up to coordinate the
pooling process between the various life and health insurance industry stakeholders. The primary
objective of pooling is to allow holders of group insurance contracts to protect themselves against the
financial impact of substantial drug claim expenses.

Current features:

Pooling only applies to Quebec certificates.

Groups of less than 1,499 plan members are subject to the same standard formula applied in the
industry, whether the group is insured or not.

Pooling thresholds per certificate have been established according to the assumption that a group
should not have a rate increase of more than 20% before inflation after an important claim.

All insurers and administrators of administrative services only (ASO) plans must
participate in the pooling system.

All drugs purchased in Canada are subject to pooling.

Recommendations for 2011

For 2011, the QDIPC recommended maintaining the coverage for groups of up to 1,499 certificates, while
updating the thresholds and costs. However, for insured groups of 250 or more certificates, Industrial
Alliance recommends using the same $39,000 threshold that applies to groups of 125 to 249 certificates in
order to better protect and stabilize future pricing. Industrial Alliance offers several pooling options for
groups of more than 250 certificates that are on a retention or ASO basis.

Size of group

(number of

certificates)

Threshold per

QDIPC certificate

Threshold per

certificate at

Industrial Alliance

Net annual cost

per individual

certificate

Net annual cost

per family

certificate

Less than 25

$5,000

$5,000

$136

$374

25 to 49

$13,000

$13,000

$63

$175

50 to 124

$24,000

$24,000

$24

$66

125 to 249

$39,000

$39,000

$9

$26

250 to 499

$60,000

$39,000

$9

$26

500 to 999

$80,000

$39,000

$9

$26

1,000 to 1,499

$100,000

$39,000

$9

$26

It is important to note that these new parameters are reflected as of now in 2011 renewals.